"Israel's gas reserves worth $130b"

A government official: Obviously, we are inclined towards exports.

Israel's natural gas reserves are worth $100-130 billion, in non-capitalized values, a senior official who accompanies Prime Minister Benjamin Netanyahu on Thursday's visit to Cyprus said in a press conference. This valuation is the basis for the sovereign fund for oil and gas royalties that will be set up.

He added that that the gas discoveries in Israeli waters could be double the known discoveries to date. (These discoveries include Tamar and Leviathan - A.B.)

The official said, "Israelis still don’t realize the significance of the change the natural gas will cause. Obviously, we are inclined towards exports. We have enough gas for our domestic needs, and even assuming GDP growth, we'll have very large surpluses. Gas is our strategic interest. It is also an economic tool for developing Israel, and a diplomatic tool for creating new partnerships, first in our region, as well as with the great powers of India and China. The US is already in through Noble Energy Inc. (NYSE: NBL), but we have the option to think about relations other great powers. We want great power interest in Israel."

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The senior official added that the closer relations that Israel is building with Cyprus are part of its Western arc - a coalition that Israel has built with countries such as Romania, Bulgaria, and Greece. He added that the agreements Israel has signed include no commitment to defend Cyprus or even to defend Israeli economic interests in Cyprus.

He said, "You are required to defend your sovereign territory; elsewhere, if you have no military alliance, you are not required to defend. We have interests, but no obligations."

Netanyahu and Cyprus President Demetris Christofias discussed cooperation on natural gas, including joint exports. Cyprus wants Israel to join in its planned $10 billion liquefied natural gas (LNG) plant, but Israel is still deliberating between the Cypriot plant and building a LNG in Eilat. A final decision is due in two months, when the inter-ministerial committee on the project completes its work.

The official added that natural gas's advantages include that it is a cleaner fuel than oil, and that it will replace imports. Israel could save $8 billion a year on the difference in price between natural gas and oil.

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